New Rules for Greener Roads: BEE's CAFE-3 Standards Unveiled

The Bureau of Energy Efficiency (BEE) has introduced a draft for the new Corporate Average Fuel Efficiency-3 (CAFE-3) standards, aimed at enhancing fuel efficiency across passenger vehicles. The proposed regulations will allow manufacturers certain flexibilities, such as pooling resources and considering hybrid and electric models.

Set to be implemented from April 1, 2027, to March 31, 2032, the outlined standards provide a framework for manufacturers to collaborate through pooling, where up to three companies can combine efforts to meet fuel consumption targets. A designated 'pool manager' will manage compliance and potential penalties.

The draft and its implications for vehicles running on ethanol-petrol blends and electric power have sparked interest, with BEE seeking stakeholder feedback within 21 days from the memorandum's issue on September 25, 2025. Currently, the country adheres to CAFE-2 standards, emphasizing a move towards greener policies.

(With inputs from agencies.)